U.S. stocks finished at their lows of the session on Tuesday as investors contended with worries about the strength of the U.S. economy and political developments in Europe that were weighing on government bonds.
How are the major benchmarks faring?
The Dow Jones Industrial Average DJIA, -0.66% declined 173.35 points, or 0.7%, at 25,962.44, the S&P 500 index SPX, -0.79% lost 23.14 points, or 0.8% to 2,900.51, while the Nasdaq Composite Index COMP, -0.68% gave up 54.25 points, or 0.7%, to 7,948.56.
On Monday, the Dow rose 249.78 points, or 1%, to end at 26,135.79, while the S&P 500 index added 34.97 points, or 1.2%, to close at 2,923.65. The Nasdaq Composite Index advanced 106.82 points, or 1.4%, to finish at 8,002.81.
The losses represents the fourth straight decline for the Dow and the S&P 500, the lengthiest period of losses since the period ended July 15.
Read: Stock-market investors rattled by bond market’s ‘warning shot’—here’s what’s next
What’s driving the market?
U.S. stocks struggled Tuesday, even though investors reacted positively to quarterly results from Home Depot Inc. HD, +4.40%, which beat expectations. However, the home-improvement company warned that lumber-price deflation, as well as the impact of possible tariffs, could impact its fiscal year sales. Its shares, still, gained were up 4.4%.
Home Depot earnings come a day after the U.S. Commerce Department said it has given Chinese telecom giant Huawei Technologies Co. Ltd. another 90-day reprieve during which it can continue to do business with American companies, without the granting of case-by-case licenses that would otherwise be needed, after the Commerce Department added it to its “entity list” in May.
Developments in Europe were putting some pressure on U.S. stocks, as Prime Minister Giuseppe Conte resigned, dissolving a tenuous pact with Deputy Prime Minister Matteo Salvini’s anti-immigrant League party and the 5 Star Movement, raising worries about the country’s leadership and sending bond prices higher and yields lower.
The 10-year Treasury note’s yield TMUBMUSD10Y, -3.58% lost 4.6 basis points Tuesday to 1.557%, while the 2-year Treasury note TMUBMUSD02Y, -2.92% yielded 1.515%, down 2.7 basis points.
Meanwhile, President Donald Trump on Monday leveled fresh criticism at the Federal Reserve, asking that the central bank consider deeper cuts to key interest rates, of around 1%. Trump did, however, declare the U.S. economy in good shape, despite the trade policy clash with China, which economists and many executives from American companies highlight as a problem for business planning, leading to the possibility of a recession. “We’re doing tremendously well. Our consumers are rich. I gave a tremendous tax cut and they’re loaded up with money,” Trump said on Monday.
“For some time, we have been concerned that investors were too reliant on Fed rate cuts and too complacent about the prospects for a China trade deal, and we are now seeing the market waking up to these risks. There is way too much uncertainty to be near term bullish today,” wrote David Spika, president of GuideStone Capital Management, in a Tuesday note.
Check out: Stocks could fall another 8% as ‘Trump put’ and ‘Fed put’ expire, says Morgan Stanley’s Mike Wilson
Weighing on technology shares was a report that indicated as many as 20 states attorneys general will launch a joint antitrust investigation of large technology firms, according to the Wall Street Journal. This comes after the U.S. Justice Department announced a separate antitrust review of the tech firms, which reportedly include Google parent Alphabet Inc. GOOG, -1.32% and Facebook Inc. FB, -1.27%, among others.
Which stocks are in focus?
Shares of Kohl’s Corp. KSS, -6.89% fell 6.9% after the retailer reported second-quarter profits and revenues that beat Wall Street expectations.
Medtronic Plc MDT, +2.62% stock rose 2.7%, after issuing the medical technology company beat analyst expectations for fiscal-fourth quarter earnings and sales, while raising its full-year outlook.
U.S.-traded shares of Sea Ltd. SE, -8.59% tumbled 8.6% Tuesday, after the online gaming company reported second-quarter results.
TJX Cos Inc. TJX, -0.08% stock slipped less than 0.1% after the discount retailer reported second-quarter revenue that fell short of expectations.
Shares of Beyond Meat Inc. BYND, +6.55% rallied 6.6%, following an upgrade of the stock by JPMorgan, which argued that there is greater potential for the plant-based meat manufacturer to expand its presence in quick-service restaurants.
How are other markets trading?
Stocks in Asia traded mixed overnight, with China’s CSI 300 000300, -0.09% falling 0.1%, Hong Kong’s Hang Seng Index HSI, -0.23% losing 0.2% and Japan’s Nikkei 225 NIK, +0.55% rising 0.6%. In Europe, stocks traded lower, with the Stoxx Europe 600 SXXP, -0.68% ending the day 0.7% lower.
In commodities markets, the price of crude oil CLU19, -0.05% rose 0.2% to $56.34 per barrel, while gold prices GCZ19, +0.39% traded closed out Tuesday’s session with slight gains. The U.S. dollar DXY, -0.19%, meanwhile, fell 0.2% relative to its major trading partners.
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